In the last five years, a growing number of studies and surveys have highlighted the importance of innovation for the economic health of companies and countries. Perhaps the most significant survey related to innovation was conducted  in 2011 by GE, which interviewed a thousand senior business executives in twelve countries. They found that "95% of respondents believe innovation is the main lever for a more competitive national economy and 88% of respondents believe innovation is the best way to create jobs in their country."
Companies need innovators--individuals who willing to take risks and who bring a spark of imagination and initiative to whatever they do. And millennials--because they have grown up as "digital natives" who use technologies to learn, connect, collaborate, and create on a daily basis--are a huge potential talent pool for companies. They are driven to create and to make a difference in the world more than any generation in history. However, as I discovered in researching my new book Creating Innovators, many millennials are very averse to working for large corporations--and many companies, in turn, don't know how to work with this generation.
Ellen Kumata, who is managing director and partner at Cambria Consulting, works closely with senior executives in Fortune 100 companies. She told me that big corporations are "really nervous about the Millennial Generation. They work differently--and are not as focused on individual achievement. They don't want to 'make it' and see themselves in multiple jobs. The real question is, will organizations be able to capture their strengths?"
How do the Millennials work--what motivates them--and what must companies do to attract and retain highly talented twentysomethings?
The first and most important thing to understand about this generation is that they tend see work as a form of adult play--an opportunity to continue to learn and to express themselves. Secondly, they are more passion-driven than achievement driven. They seek experiences that are engaging in the moment, that excite them both intellectually and emotionally. People who interpret this desire as merely a wish for immediate gratification are missing a fundamental point: what many of this generation are most passionate about is making a difference.
Millennials are more interested in making a contribution than in making a lot of money--even those who come from disadvantaged backgrounds. Perhaps because they have been more exposed to a range of environmental and social problems than previous generations, every one of the young innovators whom I interviewed wanted to solve an important problem or give back in some way. It was more than just a passion for these young people. It was a driving sense of purpose.
One of my most important research findings is the central importance of play, passion, and purpose in the development of innovators from a very early age. The best parents, teachers, and mentors encouraged these intrinsic motivations throughout the lives of the young innovators whom I interviewed. A central challenge for many companies, then, is to highlight elements of play, passion, and purpose in the work millenials are asked to do.
Millennials also work differently. They want to work more collaboratively. They enjoy learning from and interacting with others. They are also stifled by the requirements of a 9 to 5 routine. "Hold me accountable for solving the problem rather than punching a time clock," they say. If they are engaged with play, passion, and purpose, they will do whatever it takes and put in whatever time is required to get the job done.
Perhaps the greatest challenge for many companies, though, is breaking down hierarchies and creating far more two-way communication. Tom Kelley is a senior executive at one of the most innovative companies in the world, IDEO. He has also consulted extensively to corporations who want to become more innovative and so has a unique vantage point from which to view the kinds of changes that are required.
"At the senior management level in far too many companies," Kelley said, "there is this top-down attitude--the belief that all the worthwhile ideas are created at the top of the organization, and everyone else is just an implementer. The CEOs believe that they are better at everything than anyone else, and if only they had enough arms and legs, then everything would be more successful.
"The free flow of information up and down the organization is critical for innovation, but a top-down management style tends to severely restrict the emergence of any new ideas and inhibits the development of the 'collective wisdom' of the company."
According to a recent article  in The Wall Street Journal, "In many highly innovative companies, great ideas come from all levels of an organization, not just from the top...At most companies, the problem is, employees have little input. Research has found that the average U.S. employee's ideas, big or small, are implemented only once every six years."
Brad Anderson, who retired as CEO of Best Buy in 2009, turned that company around by listening to his young employees and engaging them in new ways. "For most of my years in retailing, once a company had multiple stores, your goal was to dumb down the operations so as to reduce the number of variables. Now we have this extraordinary and singular opportunity to remake the workplace and dramatically improve productivity," he told me.
"With the new communications tools, you can have a much deeper engagement with people who work for you. Line-level employees at Best Buy can now have access to the same kind of knowledge as the CEO, but they also have access to knowledge the CEO doesn't have because of their direct contact with customers. And with the increased competition, you have to find competitive breakthroughs. So you now can, and must, engage your employees in much more creative ways, as opposed to telling them how you want customers to be dealt with. Henry Ford used to say that he wanted his employees' hands, but not their minds. Retailing was the same way through the nineties. Now we have to differentiate and adapt to customers' needs, using what we learn from our line employees, while also realizing the economies of scale."
When I asked Anderson what was the number-one obstacle he had to overcome in remaking Best Buy, he answered emphatically, "The hierarchy. Once you promote someone to executive rank, the vision of what it means to be an executive is so often counterintuitive to the idea of listening to your employees, developing them, and using their expertise. It was hard to find people who were authentically inspired by wanting to lead, and developing the people they were leading--as opposed to the financial rewards and the belief that they succeeded because they were smarter than everyone else."
Authority still matters for successful innovation, but it is not the authority that comes with a position or title. It is the authority that comes from having some expertise, but it also comes from the ability to listen well and empathetically, to ask good questions, to model good values, to help an individual more fully realize his or her talents--and to create a shared vision and collective accountability for its realization. It is the authority that empowers teams to discover better solutions to new problems.
Perhaps the more important take-away from all of my interviews is that whether you are a parent, teacher, commanding officer, or employer, to enable individuals to become innovators, you must rethink the sources of your authority. The word "coach" describes this new kind of authority at its best. Innovators need excellent coaching at every age and stage. When they are engaged through play, passion, and purpose, and when they have opportunities to collaborate and receive good coaching, millennials produce extraordinary results.
Tony Wagner is the author of Creating Innovators: The Making of Young People Who Will Change the World , from which this is excerpted. He is the first innovation education fellow at the Technology and Entrepreneurship Center at Harvard and the founder and former co-director of the Change Leadership Group at the Harvard Graduate School of Education. Wagner consults widely to public and independent schools and foundations around the country and has served as senior advisor to the Bill & Melinda Gates Foundation. A former high school teacher, K-8 principal, and university professor in teacher education, Wagner is a speaker and the author of four books, including The Global Achievement Gap .
For more information about Tony Wagner please visit tonywagner.com  and follow the author on Facebook  and Twitter . For more information about the book please visit creatinginnovators.com , and follow on Facebook  and Twitter .
[Image: Flickr user I'll Never Grow Up ]